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Politburo consent may be required for forced bank transfers

Tu Giang
Wednesday,  Sep 20,2017,00:06 (GMT+7)
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Politburo consent may be required for forced bank transfers

Tu Giang

The logo of the Construction Bank is seen on a building. The Construction Bank is one of the three commercial joint-stock banks which the State Bank of Vietnam has bought through forced transfer measures - PHOTO: TL

HANOI – Lawmakers on September 18 proposed adding a provision to the draft amended law on credit institutions in which the Politburo’s prior consent must be sought for forced transfers of commercial banks.

At a session of the National Assembly Standing Committee held in Hanoi on September 18 to debate the draft law, a couple of NA deputies said some regulations on compulsory transfers of credit institutions are unclear, so they should be put under review.

The call for review comes after the State Bank of Vietnam (SBV) acquired three credit institutions, including the scandal-hit OceanBank whose former leaders are standing trial, at zero dong.

The draft law, which will go before the National Assembly at its next meeting in late 2017, provides four options for dealing with banks under special surveillance, including restructuring, dissolution, forced transfer and bankruptcy.

According to the draft law, owners and shareholders of commercial banks under special surveillance and subject to forced transfer would have to relinquish all their shares to receivers including domestic and foreign banks and investors picked by competent authorities.

“All rights and obligations of owners and shareholders of banks compelled to be transferred will end when the State Bank of Vietnam issues decisions on their compulsory transfers,” says the draft law.

SBV Governor Le Minh Hung said how to cope with commercial banks under special surveillance has not been finalized due to insufficient legal grounds.

The method of forced transfer complies with the Constitution because owners and shareholders of insolvent banks can no longer solve consequences on their own, he reasoned.

However, NA Vice Chairwoman Tong Thi Phong said such forced transfers may violate the Constitution which protects the property rights of the citizens as the Constitution makes clear that legitimate properties of citizens must not be nationalized.

NA Chairwoman Nguyen Thi Kim Ngan asked the central bank to clarify the definition of forced transfer and make sure that this regulation falls in line with the Constitution.

NA Vice Chairman Phung Quoc Hien also asked forced transfers of banks be thoroughly reviewed and sent to the Politburo for guidance before the NA looks into it.

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